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Latin America's ecommerce sector has big potential. The region has witnessed a significant shift with increase internet and mobile penetration. As consumer behavior shifts towards online shopping, latam countries have seen a steady increase in e-commerce activity, resulting in a surge in digital spending. The pandemic also played a pivotal role in this significant shift, as Latin America recorded as the global leader of growth with the fastest ecommerce growth rate in 2020 at 37%.
Prior to pandemic ecommerce accounted around 5% of total resales in latam, and it increased to staggering 13%. Yet, even with this volume, the market size of $105B in 2020 was just a fraction of the US and Chinese markets. This indicates a vast untapped potential, with projections suggesting the e-commerce market in Latin America could reach $200 billion by 2025. Payment methods have evolved, with electronic payments transitioning from being a bottleneck to a booming sector. With investors taking keen interest, the region has seen significant funding, exemplified by Nuvemshop's 628.4 million USD raised Series E round in 2021. As Latin America continues its digital transformation, ecommerce stands out as a promising domain.
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In the recent episode #23 of Find The Way podcast, we discussed with Alejandro Vázquez, the Co-founder and President of Nuvemshop & Tiendanube about these developments and the future of this sector. Nuvemshop | Tiendanube, "the brand behind the brands", is the largest platform for SMBs to start selling online in Latin America. With more than 125,000 customers, and with the latest valuation of 3.1 billion USD, they are one of the most important players in the world of ecommerce in Latin America.
Nuvemshop's journey began during the boom of marketplaces and social media in 2008. At that time, ecommerce accounted for less than 1% of total retail sales in Latin America and Argentina. Recognizing the potential, they envisioned a platform that would enable everyone to have their own online store.
A decade ago, they decided to make a strategic move to Brazil, which proved to be a game-changer for Nuvemshop. Today, Brazil stands as their main market in terms of every key performance indicators. This "Brazil first" approach allowed Nuvemshop to tailor its services to the unique needs of the Brazilian market. From payments and logistics to lending and consumer apps, the company developed a suite of services primarily for Brazilian consumers.
Another pivotal moments was the transition from a marketplace model to a software-as-a-service model. This shift enabled merchants to have greater control over their online stores, leading to a more personalized shopping experience for consumers.
With three acquisitions under its belt and a whopping 628.4 million raised at a valuation of 3.1 billion, Nuvemshop's future looks promising. As one of the largest e-commerce operators in Latin America, the company is well-positioned to further expand its reach.
Nuvemshop's story is about power of vision, adaptability and understanding market nuances. As e-commerce continues to grow in Latin America, companies like Nuvemshop will undoubtedly play a pivotal role in shaping the future.Listen to the episode here.
Listen to the episode here.
